Peru

Company Formation in Peru

Peru is a good destination to set-up your company to cater to the South American market. YourGlobalPro can assist in Peru for Company Formation, Secretarial Compliance, Tax Registration, VAT Reclaim, Document Retrieval, Trademark Registration and Citizenship Services.

The Republic of Peru is a country in western South America and sharing border with north by Ecuador and Colombia, in the east by Brazil, in the southeast by Bolivia, in the south by Chile, and in the west by the Pacific Ocean. The country is divided into 25 regions and the province of Lima and because of its varied geography and climate. Peru has a high biodiversity and equally diverse flora. The below content will explain you in detail about the requirements for company formation in Peru, know more about the process of Peru trademark registration and understand the Peru Legal Compliance requirements.

Doing Business Introduction

The Country economy is classified as upper middle income by the World Bank and is the 39th largest in the world. Also, it has a high Human Development Index. The major industries in Peru are manufacturing in textile sector and construction material, agriculture, fishing, mining and Hydrocarbons. As per Doing business report of The World Bank –Peru ranks 54 for 2017 survey.

YourGlobalPro is able to assist client with any type of company formation in Peru, trademark registration in Peru and other recurring services for your business in Peru.

Depending on the activity that you plan to undertake, there are different legal entities regulated by the Peruvian Companies Law that can be incorporated in Peru are mentioned below:

Joint Stock Company (Sociedad Anónima or S.A)

Private Closed Corporation (Sociedad Anónima Cerrada or S.A.C)

Public Corporation (Sociedad Anónima Abierta)

Limited Liability Company (Sociedad Comercial de Responsabilidad Limitada or S.R.L)

Branch (Sucursal)

Time Frame for Incorporation of Company in Peru varies from depending on the type of entity selected and sometimes unforeseen hurdles can arise. Each business type has its own advantages and disadvantages. YourGlobalPro estimates the time required for Peru Company formation process to be completed is 30-35 working days.

All Business entities which incorporated in Peru are subject to income tax.

Corporate Income Tax Rate

28%

Branch Tax Rate

28%

Dividends

6.8%

Interest Payment

4.99% Nonresidents 30%

Royalties

30%

Technical Assistance

15%

Digital Services

30%

Branch Remittance Tax

6.8%

Business Closing Date

31 December

Tax Returns Filing

End of March or beginning of April (depending on the taxpayer number)

Advance Payment of Income Tax

Due from the 9th to the 15th business day, according to a schedule.

Double Tax Treaty

Double Tax Agreements regulates the tax treatment of income or capital gains in situations where the same taxpayer is taxed twice in two countries for the same subject.

Peru has double taxation treaties with countries as mentioned below: Brazil, Canada, Chile, Korea, Mexico, Portugal, and Switzerland. However, the Tax treaties with Spain, Switzerland, Korea and Portugal are not in force yet.

For trademark registration in Peru application needs to be made to Peruvian National Institute for the Protection of Intellectual Property (INDECOPI). It takes approximately 6-8 months’ time frame to complete the trademark registration in Peru. A Trademark Registration in Peru is valid for 10 years from the registration and can be renewed six months before the trademark right expires by payment of renewal fees for 10 years indefinitely.

YourGlobalPro professionals are fully equipped to assist you with the trade mark registration process for your business in Peru. For assistance or advice in the matter of the trade mark registration or intellectual property – please feel free to write or contact us.

In Peru, The Peruvian Business Corporation Act (LGS) establishes that the financial statements of companies incorporated in Peru must follow the general accounting principles accepted in Peru and standards issued by the International Financial Reporting Standards Board (IFRSB) including the IFRS, IFRIC, and IAS, and the specific provisions approved for particular businesses. Proper accounting records are to be maintained by all the companies.

YourGlobalPro professionals can assist you with the entire bookkeeping and accounting services for your Peru Business Setup as per your business needs including implementation of financial accounting software, accounting records preparation and time to time preparation of budgets, forecasts.

Auditing service

The Banks, insurance and listed companies on the Lima Stock Exchange are required to have the financial statement mandatorily audited by an independent public accountant.

Based on the size of the business – the companies are required to prepare and file financial statements with the Authority. YourGlobalPro professionals provide auditing services as required by your business.

Banking

The Central Reserve Bank of Peru is the central Bank of Peru – that regulates the other Bank in the country. The documentation requirement differs from Bank to Bank and need to be complied for the Bank account opening. The major banks in Peru are Banco de la Nacion, BBVA Continental, Citibank Peru, HSBC, Interbank and Scotiabank. All banks are stable, reliable and offer the same level of services.

YourGlobalPro professionals can facilitate all the paper work in relation to banking need and can assist you in opening bank account for your business plan in Peru.

In Peru, the responsibility of legal compliance is not a one-time affair, but a continuous process. Below is the various Peru legal and compliance requirement to be followed by incorporated entities:

Peru does not impose foreign-currency controls. Exchange rates are determined by supply and demand.

Peru has introduced transfer-pricing rules, which are consistent with the Organisation for Economic Co-operation and Development (OECD) guidelines. Domiciled taxpayers must file an information return for transfer-pricing in June of the following fiscal year in accordance with the Tax Administration’s schedule.

Taxpayers that must file a transfer-pricing study must file it in June of the following fiscal year in accordance with the Tax Administration’s schedule.

Submit monthly security premium of 8% of the employee gross monthly salary with the Peruvian Social Tax Scheme.

HR and Employment Law and Immigration / VISA

Below are some of the important points in relation to HR & employment law in Peru:

The Employment Contract do not have expressly defined duration

Two bonuses per year, the first in July (Independence Day holidays) and the second in December (Christmas)

The right to thirty (30) calendar days of paid vacation per complete year of service

Workers who have one or more dependent children under the age of 18, or children over 18 enrolled in vocational or university education, have the right to Family Allowance

Work schedules with a weekly average of less than four (4) hours per day

Foreign workers must not exceed 20% of all personnel

Total remuneration received by foreign workers must not exceed 30% of the total payroll.

All foreign nationals must obtain visas to enter Peru

Business visas, granted to foreign nationals who enter Peru temporarily to carry out business activities that do not generate Peruvian-source income.

Work visas for designated employees, granted to foreign nationals who are sent to work in Peru by their foreign company employers to perform agreed services

Foreign national with a valid work visa may change employers after notifying the Ministry of Labor and the migratory office.